Back to Our Thinking

Furloughing – essential further information for employers

Helen Crossland explains further details produced by the government regarding its Coronavirus Job Retention Scheme and the furloughing of employees.

Following the Chancellor’s announcement on Friday 20 March 2020, the government has clarified the following:

  • All organisations qualify for the Coronavirus Job Retention Scheme provided they had a PAYE system in operation as of 28 February 2020, and have a UK bank account. It also includes businesses in administration
  • The scheme helps employers where any of their employees cannot work at all and can be ‘furloughed’. A business does not need to place its entire workforce on furlough leave. However, the scheme does not cover those who can still undertake some work (at home or the usual workplace), however limited
  • It includes any individual paid under the PAYE system so could apply to casual, zero hours or agency staff – provided they are not undertaking any work
  • For each furloughed individual, businesses can be reimbursed up to 80% of their employment costs up to a maximum of £2,500 per month. On top of that, businesses can recover the applicable employer NICs and minimum auto enrolment pension contributions. Fees, commissions and bonuses are not set to be recoverable
  • It applies only to those on the payroll on 28 February 2020. Any personnel hired after that date are excluded under the scheme
  • Any employee on the payroll on 28 February who was made redundant thereafter can be reemployed and be eligible under the scheme
  • Any employer can top up any shortfall in pay up to 100%, but is not obliged to - unless it has agreed to such with the employee
  • Where an individual’s pay varies, such as casual workers, a business can claim the higher of (i) the same month's pay from the previous year (i.e. what the individual earned in March 2019), or (ii) the individual’s average monthly earnings in the 2019-20 tax year
  • Employees can be ‘unfurloughed’, including if there is work for them to do and they are needed back into the business. However, in order to qualify for the scheme, an employee must have been furloughed for an uninterrupted block of at least three weeks
  • The scheme does not disallow multiple periods of furloughing, or for an employer to rotate those on furlough leave. Therefore, if for operational or other reasons an employer prefers to alternate employees to work or not work for a certain period that appears permissible. So long as each employee is furloughed for at least three weeks at a time
  • Employers should consider individual circumstances when considering which employees to furlough, to avoid potential claims of discrimination. Where there is a choice between which employees to furlough and which to keep working, employers may seek volunteers first and make allowances for those who would justifiably benefit from being furloughed, or as the case may be kept working, over others
  • The scheme allows furloughed employees to undertake training and do volunteer work, provided it is unpaid and does not (financially) profit the employer
  • Employees on maternity and other statutory leave, sick leave or who are self-isolating cannot be furloughed, but can be on their return
  • Employers will claim reimbursement from HMRC but should continue to pay employees direct
  • Employers can make a claim once every three weeks and will need to calculate the amount they are claiming for any furloughed employees. HMRC will retain the right to retrospectively audit claims
  • Claims can be backdated to 1 March 2020. While still not clear, it appears this may only apply to those already made redundant, including when the scheme was announced
  • The scheme is due to be operational by the end of April. It is set to be in place for three months but may be extended
  • The government is to produce further guidance including around the processing of claims and reimbursement in due course

Should you have any questions regarding the above information, or need any employment related legal advice, please get in contact with Seddons’ Head of Employment, Helen Crossland, at, or 020 7725 8034.

Share this article

What to read next

More articles from Seddons